Chicago Business Litigation Lawyer Blog

One of the most important issues at the outset of every class-action lawsuit is determining the size of the class itself. In some instances, making such a determination can be accomplished through preliminary investigations by the named plaintiff in the suit. However, the true size and scope of the class can only be confirmed by documentation obtained from the defendant company. Our Berwyn overtime class-action attorneys recently encountered a case involving a dispute over the potential members of the class, and wanted to share it with our readers.

In Smallwood v. Illinois Bell Telephone, Plaintiffs held multiple different positions, but were all classified as Outside Plant Engineers (OSPs) at Defendant’s facilities in Elgin and Des Plains, Illinois. Plaintiffs generally performed design and analysis of Defendants plant facilities and Defendant’s network and were classified as exempt employees until 2009, when Defendant reclassified all OSP engineers as non-exempt employees, which entitled them to overtime. After this reclassification, Plaintiffs filed suit for unpaid overtime wages in violation of the Fair Labor Standards Act (FLSA) because they had regularly worked in excess of forty hours per week during the entirety of their employment and had never been paid overtime previously. Plaintiffs then filed a motion requesting conditional collective action certification under §216(b) of the FLSA for all persons who were employed by Defendant as OSPs during the previous three years. Plaintiffs also requested approval of a 90-day opt-in period and a 7-day time period for Defendant to supply them with a list of putative claimants.

Defendants argued that Plaintiffs were not similarly situated because the Plaintiffs had separate and distinct job duties despite being generally referred to OSPs, and provided job descriptions as evidence of these differences. The Court found that Defendant’s arguments regarding the day-to-day work activities of the individual Plaintiffs were premature at this early stage of the case, and because the case was not “clearly beyond the first tier” of FLSA class certification. Therefore, applying a stricter standard of review was inappropriate. The Court then granted the motion for conditional certification, finding that Plaintiffs – through their individual declarations -- had met the statutorily required modest factual showing that Plaintiffs were the subject to the Defendant’s common policy or plan to violate the FLSA by failing to pay OSPs overtime wages. Defendants also requested that the notice period be limited to 30 days, but the Court found that an opt-in period of 60 days was appropriate, and gave Defendants two weeks to supply the putative member list, so that collective action notices could be mailed in a timely manner.

Continue reading "Northern District of Illinois Federal Court Grants Conditional Class Certification for Lawsuit for Unpaid Overtime " »

Most companies encourage their employees to innovate and come up with ways to improve the processes, products, and service of the business. Such improvements may be patentable inventions, and it is important for business owners to establish who owns that intellectual property and protect any IP that accrues to the company. In the absence of an explicit employment agreement, the ownership of such inventions can come into dispute, and our Joliet business attorneys discovered one such case in the Central District of Illinois federal court.

Shoup v. Shoup Manufacturing is a dispute between a company and its former president over the ownership of several patents. Ken Shoup, Plaintiff, was the president of Defendant Shoup Manufacturing for over twenty years, and during his time as president he conceived of several inventions that were patented on behalf of Defendant. Defendant used those patents and sold products based upon them. However, Plaintiff did not have an express or written employment contract that required assignment of the inventions to Defendant. Eventually, Plaintiff terminated his relationship with Defendant, began a similar business to compete with Defendant, and filed suit alleging patent infringement for Defendant’s continued use of his inventions. Plaintiff sought an injunction to prevent that continued use and monetary damages under 35 USC §271.

Defendant responded to Plaintiffs lawsuit by denying that Plaintiff owned the patents in question, and alleged that Plaintiff was obligated to assign the patents to Defendant, and that it had a valid license to the inventions. Defendant also filed a counterclaim alleging that Plaintiff developed the patents using company resources while he was an employee and officer of Defendant, and that Defendant was the rightful owner of the patents. Defendant sought a compulsory written assignment of the patents and an accounting of Plaintiff’s unauthorized exploitation of them. Plaintiff then filed a motion for Judgment on the Pleadings to dismiss Defendant's counterclaims.

Plaintiff argued that the Court had no jurisdiction over the claims because ownership of the patent was determined by Illinois State law. The Court agreed that it did not have original jurisdiction over the dispute, but because the counterclaims for ownership of the patents arose out of a common nucleus of operative facts regarding Plaintiff's original patent infringement suit (which was a federal claim), supplemental jurisdiction was proper. The Court therefore denied Plaintiffs motion, finding Defendant had satisfied the requirements for supplemental jurisdiction under 28 USC §1367(a), and allowed the counterclaim to proceed.

Continue reading "Federal District Court Exercises Supplemental Jurisdiction Over Counterclaims Regarding Ownership of Employee-Created Farm Equipment Patents" »

Class-action lawsuits are common in unpaid overtime cases because the misclassification of employees or miscalculation of overtime usually happens on a large scale because major companies have such sizable work forces. Because such lawsuits can prove to be quite costly, defendant employers will do whatever they can to dispose of those claims in any way possible. DiTommaso-Lubin knows the 'tricks of the trade' that defendants use, and our Skokie overtime attorneys found a federal case the illustrates one of the tools that wage claim defendants utilize.

Wright v. Family Dollar Inc. is a putative class-action filed by former associates who worked for Defendant Family Dollar and were allegedly not paid regular and overtime wages that they earned in the course of their employment. The named plaintiff, a store manager, alleged that Defendant “withheld compensation from associates by giving its store managers unfeasibly low payroll budgets” that forced those managers to require associates to work without being paid. The case, which alleged violations of the Illinois Wage Payment and Collection Act, and the Illinois Minimum Wage Law, was initially filed in the Cook County Circuit Court, but was removed to the federal court by Defendant.

Defendant then filed a motion to strike class allegations pursuant to FRCP23(c)(1)(A) and (d)(1)(D), claiming that Plaintiffs could not establish typicality and adequacy of representation. The Court granted Defendant's motion, holding that the named plaintiff, as a manager, participated in the wrongful conduct at issue and her counsel therefore had a conflict of interest with the class members who were associates. The Court also held that the typicality requirement was not met because there were defenses unique to the named plaintiff and other managers in the putative class that did not apply to associate class members.

Continue reading "Northern District of Illinois Federal Court Grants Motion to Strike Putative Overtime Class-Action" »

Every day there are hard working people who are denied the overtime wages that they have rightfully earned. At DiTommaso-Lubin, we have much experience representing those with unpaid overtime claims in class-action litigation. As such, we track the changes in the wage laws and are always looking out for new court decisions in the field.

Alvarez v. City of Chicago is a recent class-action case brought by paramedics in the city of Chicago for the systematic miscalculation of their overtime wages. In so doing, Plaintiffs alleged that Defendant willfully violated the Fair Labor Standards Act (FLSA) when it failed to properly compensate the Plaintiffs. The parties each filed motions for summary judgment, and the trial court ruled in favor of Defendant. In making the ruling, the trial court found that the Plaintiffs were not similarly situated and they could not be “readily divided into homogenous subgroups.” The lower court then dismissed the claims and directed the parties to arbitrate the dispute.

On appeal, the Appellate Court disagreed with the trial court's decision, and held that the case could proceed by using sub-claims if the Plaintiffs were similarly situated and common questions predominated. The Court also held that the case should not have been dismissed; instead the Plaintiffs should be allowed to proceed individually if class certification is inappropriate. The Court then remanded the case with instructions for the district court to consider which form of judicial resolution would be most efficient.

Continue reading "Appellate Court Overturns Dismissal of Chicago Paramedics Unpaid Overtime Class-Action" »

Large corporations are often built upon the labor of many hard-working hourly employees. Unfortunately, such companies do not always pay their employees the wages that they have earned, and when such mistakes are made, those employees must do what they can to get what they are owed. When enough employees have been denied their earned wages, a class-action lawsuit may be the most efficient means to get everyone their unpaid wages, and our Naperville overtime class-action attorneys recently discovered another such lawsuit in the Northern District of Illinois federal court.

In Hundt v. DirectSat USA, Plaintiffs were employed by Defendant as warehouse managers who regularly worked more than forty hours per week, but were not paid any overtime because Defendant classified them as exempt employees. Plaintiffs believed that they were misclassified because their job duties did not meet the overtime exemption requirements under the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Act (IMWA), and filed a class action lawsuit for the unpaid overtime. After sending out opt-in notices to the potential class members, Plaintiffs discovered that the class should not be limited to just those employees with the title of warehouse manager. Plaintiffs therefore amended the complaint to broaden the class to include warehouse supervisors and other workers in similar positions, and filed a motion to send notice to these additional putative class members.

Defendants opposed the motion, stating that there were significant differences between warehouse managers and supervisors and claimed that Plaintiffs failed to sufficiently allege the existence of a common decision, policy, or plan to deprive them of overtime wages. The Court disagreed with Defendants, holding that all of the putative plaintiffs were similarly situated despite their varied job titles. In making its decision, the Court cited several internal communication emails that indicated the titles were interchangeable, and that was enough to meet the minimal burden required. Thus, the Court granted the motion to send notice to the additional class members.

Continue reading "Northern District of Illinois Federal Court Grants Motion to Send Notice to Expanded Class in Unpaid Overtime Class-Action Litigation" »

Members of the board of directors of a corporation have the responsibility to orchestrate the business in such a way that is advantageous to the shareholders and the continued growth and prosperity of the company. However, there are times when those directors may act in a way that serves their own interests, and the only way to protect the business is for shareholders to file a derivative suit on behalf of the company. DiTommaso-Lubin is always researching new developments in this field of law, and our Chicago shareholder derivative action attorneys recently came across one such case filed here in the Northern District of Illinois, Eastern District federal court.

Reiniche v. Martin is a double derivative suit brought by individual plaintiffs who are shareholders of a corporation, Health Alliance Holdings (HAH), that itself is a primary shareholder of HA Holdings (Holdings), another corporation. Plaintiffs allege that Defendants sought to freeze them and other HAH shareholders out through a series of illegal and wasteful acts that resulted in an insider transaction to sell Holdings for $10 and debt relief to another company in which Defendants had an interest. That transaction was approved by Holdings’ board of directors in spite of the fact that there was no quorum present to do so, and HAH was denied its right to sit on the board. In doing so, Plaintiffs alleged that the Defendant directors and other shareholders of Holdings breached their fiduciary duties to the company. Defendants then moved to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6), claiming that Plaintiffs lacked standing, their claim was untimely, and the claims are insufficient under the law and barred by the business judgment rule.

The Court held that Plaintiffs did not have double derivative standing because such standing is only granted in the context of a parent/subsidiary relationship, and HAH was only a shareholder in Holdings – it was not a parent or holding company of Holdings. The Court went on to say that because the individual Defendant shareholders were each minority owners, none of them had a controlling interest in Holdings, and therefore did not owe a fiduciary duty to the Plaintiffs. As such, the Court found no policy reason for invoking a double derivative action and granted Defendants’ motions to dismiss.

Continue reading "Northern District of Illinois Federal Court Dismisses Double Derivative Shareholder Action Due to Lack of Parent / Subsidiary Corporate Relationship" »

Our lawyers are passionate about protecting the rights of workers and are constantly researching new wage and hour decisions rendered by the federal courts here in Illinois. Our Buffalo Grove overtime class-action attorneys recently discovered a case that impacts potential clients seeking to certify wage and hour class actions under the Federal Labor Standards Act (FLSA).

The Plaintiff in Russell v. Illinois Bell Telephone Co. worked at Defendant's call center in Arlington Heights, Illinois for five years and was paid hourly wages, commissions, and bonuses. Plaintiff and the other purported class members all had scheduled shifts and lunch breaks, but allegedly were required to perform work tasks both before their shifts and during their lunch breaks. Plaintiffs were not paid for the work they performed pre-shift and during lunch breaks, and filed suit for their unpaid wages. The trial court then conditionally certified the class, and additional discovery commenced.

Through discovery, Plaintiffs learned that Defendant has a written policy that hourly employees must obtain permission from a supervisor before working overtime and any employee who works overtime must be compensated accordingly. Defendant's Code of Business Conduct also explicitly states that “managers are prohibited from requiring nonexempt employees to work off the clock.” However, after deposing 24 individual Plaintiffs, the record showed that the majority of Plaintiffs had to spend time logging into their computer systems prior to the start of their shift because their supervisors had instructed them to be “open and available” at the start of their shift. To be “open and available,” Plaintiffs had to boot up their computers and get several applications up and running. This system start-up process took between three and twenty minutes to complete depending upon the individual computer.

In addition to the pre-shift issues, the record showed that Plaintiffs would often have to work a few minutes past the end of their shifts to finish handling calls already in progress. Because Defendant has a policy that any overtime worked in an amount less than eight minutes is not compensable and many of the post-shift calls are resolved in less than eight minutes after the end of their shift, Plaintiffs were not compensated for the overtime worked while finishing calls at the end of the day.

After more discovery and the deposition of thirty-nine individual Plaintiffs, Defendants moved to decertify the class based upon individual issues embedded in the case and the absence of a company-wide policy that violates the FLSA. The Court found that the class members shared enough of a factual and legal nexus that pursuing a class-action was proper through the use of subclasses where necessary. The Court went on to decertify the individual claims that did not fall into the enumerated subclasses of pre-shift overtime, post-shift overtime, and work performed while on lunch breaks. Finally, the Court stated that due to the large amount of discovery still to be performed, that they reserved the right to revisit the decertification issue should it become apparent that the case was unmanageable as a class-action.

Continue reading "Class Members Don't Need Identical Claims to Maintain a Class-Action Under the FLSA" »

Filing a lawsuit requires some legwork up front, but overall is a relatively painless process. Getting a class-action lawsuit certified by a federal court, however, is neither easy nor straightforward. DiTommaso-Lubin focuses on getting major wage and hour lawsuits certified as class-actions and getting them resolved. Our Buffalo Grove overtime attorneys unearthed a federal case from the Northern District of Indiana regarding class certification that is of interest to both our present and future wage claim clients.

The dispute in Powers v. Centennial Communications Corp. arises out of claims for unpaid overtime and overtime adjustments for sales commissions for work performed by Plaintiffs in their capacity as a sales representatives for Defendant. Additionally, Plaintiffs claim that when they were paid commission-based overtime, the timing of those payments also violated federal law. The named Plaintiff filed suit as a result, and she alleged violations of the Indiana Wage Payment Satute and the federal Fair Labor Standards Act (FLSA), and sought to certify a class-action on the federal claim under FLSA.

The District Court found that, in spite of the fact that she was not paid owed overtime wages, Plaintiff failed to make FLSA's required initial showing that she and her putative class members were “victims of a common policy or plan” to do so. Finding fault with the fact that Plaintiff had only shown that one person (the named Plaintiff) had not been paid correctly, the Court declined to certify the class as to the unpaid overtime claim, as it would “have the effect of turning every individual violation of the FLSA into a bulky collective action.”

The Court then turned to the unpaid commissions-bassed overtime claim and determined that it could proceed to the opt-in stage because Defendant had systematically deferred the commission-based payments pursuant to its stated Sales Compensation Plan. Because the applicable statutes allow only for a limited delay in the payment of overtime adjustment payments and Defendant had repeatedly waited weeks to make the required payments after they were earned, the case could proceed as a class-action.

Continue reading "Indiana District Court Certifies Class-Action Under FLSA for Untimely Overtime Payments" »

Many corporations are owned by a group of shareholders, but the business decisions are made by a Board of Directors. Shareholders trust that the board will make decisions that are in the best interests of the business, but when directors fail to do so, shareholders can bring a derivative lawsuit on behalf of the company itself. The Arlington Heights shareholder lawsuit attorneys at DiTommaso-Lubin have been involved with many shareholder disputes, and our attorneys recently uncovered a decision in the field handed down by the Northern District of Illinois Federal District Court that we found quite interesting.

In Oakland County Employees Retirement System v. Massaro, the plaintiff shareholders brought a derivative action on behalf of nominal defendant Huron Consulting Group against Huron’s Board of Directors and executive officers. Plaintiffs brought the suit because they believed that Defendants overstated Huron’s revenue for years, which artificially inflated the value of Huron stock. Plaintiff brought suit for violations of the Securities Exchange Act, breach of fiduciary duty, waste of corporate assets, and unjust enrichment. However, in addition to the suit brought by Oakland County Employees Retirement System in federal court, two separate state court actions were previously filed by other individual Huron shareholders. Because of these state court actions, the Defendants in Oakland County filed a motion to stay the federal proceedings pending the outcome of the lawsuits filed in state court. Defendants argued that the federal action should be stayed under the abstention doctrine because the state and federal lawsuits were parallel actions.

The Court stated that for the lawsuits to be deemed parallel, they must involve substantially the same parties and substantially the same issues. Upon evaluating the pleadings, the Court held that because Plaintiffs brought a federal claim under section 14(a) of the Securities and Exchange Act -- and no such claim was included in either of the Illinois state litigations -- the state and federal actions were not parallel. The Court thusly denied the motion to stay, and went on to state that even in the absence of the 14(a) claim, Defendants did not show that exceptional circumstances existed to justify the court abstaining from ruling in the case.

Continue reading "Northern District of Illinois Federal Court Denies Motion to Stay Shareholder Derivative Suit Under Abstention Doctrine " »

A recent federal court decision our firm litigated provides insight into a party's duty in e-discovery in federal court cases. The Court noted that all parties must make a thorough search of all computers in response to e-discovery requests. The Court entered sanctions against the defendant RV dealer and its owner for failing to comply with their obligations under Rule 26 of the Federal Rules of Civil Procedure to make a thorough electronic search of all computers utilizing search engines as opposed to simply producing what appeared in readily viewed files in the computers.

The case IWOI, LLC v. Monaco Coach Corp. and Barrington Motors Sales is pending in the Federal Court for the Northern District of Illinois. Plaintiff claims that Defendants violated the Magnuson Moss Warranty Act and the Illinois Consumer Fraud and Deceptive Business Practices Act by selling it a Monaco RV costing hundreds of thousands of dollars which allegedly had a preexisting "bump steer" problem. Defendants denied these allegations and claimed there was no "bump steer" problem or if there was such a problem it was a minor nuisance that didn't give rise to safety concerns.

After some discovery irregularities, Plaintiff obtained the right to have it own forensic computer expert Daniel Stratton to search Defendants' computers for withheld or missing documents. The motion for sanctions and other relief centers on what the Plaintiff found as a result of its expert's search.

Stratton discovered an e-mail from defendant Barrington Motor Sales' president Sean Bransky to Adam Gudger, the sales manager of defendant Monaco Coach Corporation (“Monaco Coach”). In support of Plaintiff's sanctions motion, Stratton attested in an affidavit that the email could have been located through an ordinary word search using the native search engine in the Windows operating system.

In the May 26, 2006 e-mail, Bransky describes the problems with the motor home that his dealership experienced when the motor home was driven:

The main issue is the drivability of the coach. When it arrived, we drove it and it did not drive like any other Beaver we've driven. It was very difficult to keep the road and a tremendous amount of bump steer. Also, there was a terrible clunking when the suspension moved up and down. We sent it to the frame/suspension specialists (Champion Frame align) and they said the trailing arms hit the frame at the front brackets when the vehicle dips with the air spring set at 10.5″. When they adjust the springs to 11.5,” the trailing arms don't hit but the bump steer increases to the point where it is hardly driveable.

We called Monaco and spoke with Taylor Spike who was very prompt and concerned about the issues. He sent out a factory chassis specialist from Indiana whose name was Randy. Randy spent a day and a half trying to figure this one out. He cured the trailing arm issue that was hitting the frame, but cannot cure the bump steer issue. There is still a large amount of clunking and banging under the coach when it is driven but he did not know what it was. He left back to Indiana today saying coach is still bad and does not know what to do except for trying heavier shocks and air limitors from the front air bags.

In awarding sanctions for Defendants' failure to produce this email, the Court found that:

The relevance of this document is obvious. Defendants, in their opposition to the motion for sanctions, spend a great deal of time explaining how this e-mail does not contradict Mr. Bransky's deposition testimony. That question ultimately is not for this Court to resolve. We note, however, that in his testimony, Mr. Bransky categorically denied that his dealership knew that the motor home had a bump steer problem and stated that even if such a problem existed, it did not present a safety issue. Both of these assertions seem, at least in part, to be contradicted by this e-mail message.

In concluding that Defendants should pay half the cost of Plaintiffs' expert as a sanction for failing to produce this one email the Court reasoned:

To claim now that plaintiff is at fault for not telling defendants how to search their computer system is specious. Defendants were on notice that plaintiff believed the production was inadequate and apparently did nothing further to locate additional electronic discovery until plaintiff forced the issue.The burden is not on plaintiff to figure out what relevant information might be stored on defendants' computers. Federal Rule of Civil Procedure 26(b)(1) states plainly that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.” .. The Rule, thus, places the burden on the party responding to discovery to identify whether there may be materials responsive to discovery requests that are stored on its system, but because of burden or cost are not reasonably accessible. In this case, that did not happen. Instead, defendants apparently pulled only materials that were still available on employees' desktops and made no effort, at least not one that has been explained to this Court, to look any further, even when they became aware that there was a possibility that there may be missing documents. Although Mr. Bransky may not have the necessary expertise to have found the document—which was not on a back-up tape or in other more remote storage but, instead, was on his own hard drive, as well as on defendants' network server—defendants were obligated to search those drives more throughly than they apparently did or explain why such a search would be too burdensome, costly or difficult and, therefore, should be excused.

You can view the full opinion by clicking here.

Continue reading "RV Dealer Sanctioned For Failing to Perform Adequate E-Mail Search of Computers in Discovery in Federal Court Lawsuit" »

After hiring someone, businesses expect not only that their new employee will perform his job adequately, but also that he will do no harm to the company or its ability to do business. Employers know that their expectations are not always met by those employees, which is why the use of employment contracts with non-compete clauses are quite common these days. Our Chicago restrictive covenant attorneys just discovered a recent court decision that details a dispute between an employer and an ex-employee regarding one such employment agreement.

In Zep Inc. v. First Aid Corp., Plaintiff Zep employed the individual Defendants as sales representatives for its industrial cleaning products business pursuant to an employment agreement that contained non-disclosure, non-solicitation, and non-compete provisions. During their employment, Defendants had access to Plaintiff's customer lists, supplier lists, pricing information, and other proprietary information. Eventually, a competitor, Defendant First Aid, hired the other named Defendants away from Plaintiff and subsequently solicited Plaintiffs clients and other employees.

As a result, Plaintiff filed suit for breach of contract, trade secret misappropriation under the Illinois Trade Secrets Act (ITSA), and tortious interference with contract. Plaintiff contends that First Aid induced the other Defendants to breach the employment agreements they signed with Plaintiff and that the other Defendants used and disclosed Plaintiffs trade secrets. In response, Defendants filed motions to dismiss the claims, which were granted as to three of the individual defendants due to a lack of personal jurisdiction. The Court found that because three of the individual Defendants were residents of Michigan and Ohio, Plaintiff is located in Georgia, and the employment agreements were signed outside of Illinois, they did not have the requisite minimum contacts to give an Illinois court jurisdiction over the matter. Furthermore, Plaintiff had not alleged that any of Defendants' actions were aimed at Illinois, and neither had their actions caused harm to Plaintiff in Illinois, so specific personal jurisdiction was also improper. The Court denied the remaining motions to dismiss – finding that the non-compete provisions were enforceable because the geographic limitations were reasonable and the non-solicitation clause was limited in scope to Plaintiff's competitors for a span of one year. Plaintiff's allegations were also found to be sufficient to support a claim under the ITSA because it had identified a list of confidential information and trade secrets in its pleadings.

Continue reading "Northern District of Illinois Grants Motion to Dismiss in Trade Secrets Case Due to Lack of Personal Jurisdiction" »

There are many employees out there who should be getting paid overtime wages, but because they have been misclassified by their employers, those people are being paid on a salary basis instead. We at DiTommaso-Lubin know that these things happen, which is why we fight for the rights of employees who have been paid incorrectly. Our Evanston overtime class action attorneys recently discovered one such case regarding the misclassification of employees and wanted to share it with our readers.

In Gromek v. Big Lots, the named Plaintiff worked for Defendant as an assistant store manager, and was never paid for any of the time he worked in excess of forty hours per week. Plaintiff regularly worked over forty hours, and spent most of his time performing non-managerial and non-exempt duties for Defendant, but was paid a salary and never received overtime wages. As such, Plaintiff filed suit to recover his unpaid overtime pursuant to the Fair Labor Standards Act (FLSA), and sought conditional class certification of the action under FLSA §216(b) to include all of his fellow assistant store managers who worked for Defendant.

The Court sought to determine whether Plaintiffs were similarly situated enough to meet the requirements of §216. Plaintiffs provided declarations from fifteen potential class members stating that they had all been misclassified and underpaid due to Defendant’s common policy, which weighed in favor of granting class certification. However, a previous and similar class-action filed by another group of Defendant’s assistant store managers was decertified because many of those Plaintiffs had significantly different job duties, which made the claims unsuitable for resolution by class-action. Due to this earlier case, the Court denied the class certification motion because Plaintiffs had failed to show why their case differed from the prior action, though the Court stated it would be willing to hear any such arguments the Plaintiffs could provide.

Continue reading "Northern District of Illinois Denies Class Certification in an Action to Recover Unpaid Overtime Under FLSA" »

Trade secrets are the lifeblood of many companies these days, and protecting those secrets is always of the utmost importance. Through our years of experience advising and representing companies, we here at DiTommaso-Lubin know how to maintain the security of your trade-secret portfolio and prosecute those who attempt to misappropriate any of your trade secrets. Because employees with trade-secret knowledge come and go with such frequency these days, our Des Plaines trade-secret attorneys wanted to share a recent court decision that illustrates the perils companies face due to departing employees.

In Mintel International Group LTD v. Neergheen, Plaintiff Mintel initially employed Defendant in its London-based marketing department, and upon his hiring, Defendant signed an employment contract that included non-compete and confidentiality restrictive covenants. Defendant was then transferred to Plaintiff's Chicago office where he signed a second employment contract containing non-compete and confidentiality clauses similar to those in the first agreement. This second contract also contained a clause prohibiting the solicitation of Plaintiff's employees and customers – all of the clauses were in effect for one year after the cessation his employment with Plaintiff. Defendant eventually left the employ of Plaintiff and began working for a competitor company in a different product area in order to comply with his non-compete. Plaintiff failed to ask Defendant to return the laptop given to him by the company during his exit interview, and also failed to ask him about proprietary information he had emailed to himself prior to his departure – despite knowing that he had taken possession of the information before he left.

Eventually, Plaintiff filed suit against Defendant alleging violations of the Computer Fraud and Abuse Act (CFAA), the Illinois Trade Secrets Act (ITSA), and breach of the non-disclosure, non-compete, and non-solicitation provisions in his employment contract with Defendant. Plaintiff sought injunctive relief and money damages. After a bench trial, the Court found that Defendant had not violated the CFAA because he had only emailed copies of Plaintiff's files to a private email address, which did not satisfy the damage requirement of the statute. The Court next held that, while the copied files qualified as trade secrets, Defendant did not violate the ITSA because there was no proof that he had or would use the information in his position at a competing company. Finally, the Court found that the restrictive covenants were not invalid as a matter of law, and enjoined Defendant from: ever using any of Plaintiff's proprietary info, contacting any of Plaintiff's customers for nine months, or working for his new employer in the same area as he had with Plaintiff for a period of six months.

Continue reading "Northern District of Illinois Federal Court Grants Injunction in Misappropriation of Trade Secrets Case" »

Every man and woman who goes to work each day has the right to be paid for his or her labor, but sometimes the companies for whom they work either fail to do so, or miscalculate the wages that they owe their employees. Those miscalculations may be intentional or they may be by mistake, but that does not change the fact that they must pay for the errors. At DiTommaso Lubin, we represent many workers who were not paid the regular and overtime wages they are owed, and our Barrington class-action overtime attorneys are always tracking new court cases in the field of wage and hour law.

One recent case from the US District Court in the Northern District of Illinois is Chavez v. Don Stoltzner Mason Contractor, Inc. The action was filed by Plaintiffs, who were former employees of Defendant and provided masonry installation services to Defendant. Plaintiffs claimed that Defendant illegally adjusted their time records downward to avoid paying them the required time-and-a-half rate for the overtime that they worked. Plaintiffs also alleged that they were required to work on Saturdays without pay for an extended period as well. Eventually, Plaintiffs filed a class-action in Illinois state court alleging violations of the Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law (IMWL) for unpaid overtime wages. Defendant subsequently removed the case to federal court. Plaintiffs then sought to certify an IMWL class-action under Federal Rule of Civil Procedure 23 and pursue their FLSA claims individually.

The Court granted class certification under Rule 23(b)(3), holding that the numerosity requirement was met because there were between seventy and 130 potential plaintiffs, and joinder of that many actions would be impracticable. Next, the Court found Rule 23's commonality requirement was met because Defendant had a common practice of underpaying its employees’ overtime wages, and the typicality requirement was satisfied because all potential plaintiffs’ claims were based upon the same violations of the IMWL. Because there was no evidence the named Plaintiffs had a conflict of interest with the remaining class members and their counsel was deemed competent to pursue their claims, the Court found that the class was adequately represented. Finally, in granting class certification, the Court held that there was a single common issue (Defendant’s policy of not compensating employees for overtime) overriding the litigation, and that a class-action was the superior method for resolving the claims.

Continue reading "Overtime Class-Action Certified in Northern District of Illinois Federal Court" »

More and more businesses are utilizing employment agreements with new hires, and often those agreements contain arbitration dispute resolution clauses. As experienced wage and hour class action attorneys, DiTommaso-Lubin is familiar with such agreements and our attorneys are always mindful of court rulings that affect this area of the law. The Northern District of Illinois, Eastern Division federal court rendered a decision affecting employment arbitration agreements recently, and we wanted to make our readers and clients aware of the court's ruling.

Brown v. Luxottica Retail North America Inc. pits a class of salaried retail, lab, and general managers against their employer Lenscrafters. Plaintiffs argued that they were non-exempt employees, and therefore were entitled to overtime compensation. The employees filed suit alleging violations of the Fair Labor Standards Act (FLSA), Illinois Minimum Wage Law (IMWL), and Illinois Wage Payment and Collection Act (IWPCA) for unpaid overtime wages. In response, Defendant moved to compel one of the named plaintiffs to arbitrate her claims and stay the proceedings with respect to that plaintiff. Defendant so moved pursuant to a dispute resolution agreement contained within the employee handbook Plaintiff was given while still employed by Defendant. Defendant required Plaintiff to accept the terms of the handbook in order to continue her employment. The agreement contained a form to allow the employee to opt-out of the arbitration clause and instructions how to fill it out, but Plaintiff had failed to sign the form. Plaintiff objected to Defendant's motion on the grounds that it was unconscionable and unenforceable.

In considering Plaintiff's arguments, the Court evaluated the procedural and substantial unconscionability of the agreement. The Court found no procedural unconscionability because the arbitration language was “clearly set off” from the rest of the employee handbook and was easy to find by those who actually read the entire handbook. Next, the Northern District held that there was no substantive unconscionability due to the existence of the opt-out clause and the fact that the Plaintiff chose not to exercise her right to opt-out even though she signed a document stating she had read and accepted the terms of the handbook. Finally, the Court ruled that nothing in the FLSA precludes an agreement to arbitrate an FLSA claim, and granted Defendant's motion to compel arbitration.

Continue reading "Northern District of Illinois Rules that Arbitration Clause in Employee Handbook is Enforceable" »

DiTommaso-Lubin has successfully litigated many business disputes, and in our many years of experience we have found that contract claims are among the most contentious conflicts. Because so many of our clients deal with breach of contract issues, our Elmhurst business attorneys are always mindful of new court decisions issued in this area of the law. In fact, our lawyers just discovered one such case, Jumpfly Inc. v. Torling, in the US District Court for the Northern District of Illinois.

Jumpfly Inc. v. Torling pits a Plaintiff employer against two former employees who allegedly violated the non-compete agreements signed when they were hired by Plaintiff. Plaintiff contends that Defendant Torling started a competing pay-per-click internet advertising side-business while in Defendant's employ, and upon discovering its employee's side-business, fired him and sent a cease and desist letter demanding that he stop violating the non-compete. The parties eventually negotiated a settlement allowing Torling to continue his business, but the agreement prohibited him from soliciting any of Plaintiff's employees. Torling allegedly solicited Defendant Burke -- who was working for Plaintiff at the time under a similar non-compete agreement -- and got him to quit his position with Plaintiff to work for Defendant Torling.

Plaintiff then filed suit against the two individuals and the new company (Windy City) that they worked for -- alleging rescission of a settlement agreement, breach of contract, violations of the Lanham Act and Illinois Deceptive Trade Practices Act, and intentional interference with contract based upon non-compete agreements between the parties. Plaintiff's requested the Court to enjoin Defendants' competitive business conduct and for monetary damages. In response, Defendants filed a motion to strike Plaintiff's request for injunctive relief and filed a motion to dismiss under 12(b)(6).

The Court granted the motion to strike as to the breach of contract claim because the two year term of the non-compete agreement had already expired and an injunction would result in an unreasonable restraint of trade. The Court also noted that Plaintiff's seven-month delay -- after discovery of the illicit conduct -- in asking for an injunction also weighed in favor of Defendants. The Court denied the motion to strike as to the statutory claims, however, because injunctive relief is provided by both laws which rendered the motion premature.

Next, the Court granted Defendants' motion to dismiss the breach of contract and intentional interference with contract claims due to pleading insufficient facts that Defendant Windy City induced either of the individual Defendants to breach their contracts with Plaintiff. In dismissing Plaintiffs conspiracy to interfere with contract, the Court applied the Intracorporate Conspiracy Doctrine and declined to agree with Plaintiff's argument that Defendants' conduct fell with in an exception to the rule. Finally, the Court denied the motion to dismiss the settlement agreement breach claim as the effect of Defendants' breaches had yet to be determined.

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When large companies fail to properly compensate their employees, a class-action lawsuit is usually the most efficient means to resolve the legal claims between the two parties. At DiTommaso-Lubin, our Chicago Fair Labor Standards Act lawyers fight for the rights of those who are due unpaid wages, and our lawyers are always striving to find ways to best serve our clients' interests. As a firm that focuses on wage and hour class-actions, we are always watching for new court decisions in the area, and our Orland Park overtime lawyers recently found one such case in the federal Northern District of Illinois, Eastern Division Court.

Slayton v. Iowa College Acquisition Corp. is a case brought by a plaintiff who worked for Defendant as an Admissions Advisor for Kaplan University, where she and other putative class members were paid an hourly wage and were frequently required to work more than forty hours a week, but were not paid overtime. Plaintiffs alleged that Defendant required them to arrive at work prior to their shifts in order to perform certain job duties without compensation. Upon filing the putative class-action, the named plaintiff proposed two sub-classes -- one for overtime violations of the Illinois Minimum Wage Law (IMWL), and one for unpaid wage violations under the Illinois Wage Payment and Collection Act (IWPCA) -- and sought to certify them under Federal Rule of Civil Procedure 23(b)(3). Defendant did not dispute that the proposed class met the numerosity and adequate representation requirements of the rule, but did argue that Plaintiffs could not meet the commonality and typicality requirements.

In denying class certification, the Court found that Plaintiffs did not establish that Defendant engaged in standardized conduct to toward members of the proposed class. While there was evidence that Defendant required Plaintiffs to arrive early, it was unclear that Defendant had a widespread policy to not record that time. The Court also held that typicality was not established because not all the class representative's claims had the same essential characteristics of the claims of the class at large and consequently, no common questions of law or fact predominated over the individual claims of the class members.

Continue reading "Illinois Federal District Court Denies Class Certification for Violations of IMWL and IWPCA Under FRCP 23 " »

The holiday season is a busy time for many corporations and particularly for those tied to the retail industry, increased holiday business usually means that employees have to work longer hours to keep up with consumer demands. Our Aurora overtime attorneys came across a case that illustrates what can happen when employers fail to compensate employees who work extra hours during such times of increased workflow.

In Nunes v. Chicago Import Inc. Plaintiffs worked for Defendant as warehouse laborers responsible for loading and unloading merchandise from delivery trucks and keeping the warehouse organized. In performing these duties, Plaintiffs routinely worked over forty hours per week, and worked seven days a week during the month of December. Plaintiffs were paid a flat rate of $300.00 per week for the first three weeks of the month, and were paid $400.00 for the fourth week. They were paid an additional $50.00 per week in December, but never received hourly or overtime wages for their services. Plaintiffs then filed suit alleging violations of the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law (IMWL), and asked the Court to issue an Order to Authorize Notice to Similarly Situated Persons under FLSA Section 216(b).

The Court granted Plaintiffs' motion, holding that it was proper to leniently review the pleadings at this early stage of the litigation. As such, the five sworn declarations submitted by the Plaintiffs established that the representative and pending class members were sufficiently similarly situated to proceed with a class action. Defendants made objections that the proposed notice was too broad, and should not include administrative or executive staff. The Court agreed with Defendant and ordered adjustments to the form of the notice to exclude such employees, but otherwise found in favor of the Plaintiffs and granted their motion to authorize notice.

Continue reading "Federal District Court in Illinois Authorizes Class Notice in Warehouse Worker Overtime Litigation" »

When dealing with class-action wage and hour disputes, defendants will try to get the court to dismiss claims by any means that they can, and there are a variety of legal defenses that allow them to do so. At DiTommaso-Lubin, our overtime lawyers are familiar with all of the tricks of the trade, so to speak, so they were interested to discover a case that illuminates just one of these many tools that is utilized by defendants to escape liability.

In Anyere v. Wells Fargo Co. Inc, Plaintiffs were current and former employees of Defendant and worked as credit managers who provided customers primarily with loan consolidation services. Plaintiffs filed a lawsuit alleging overtime violations under Fair Labor Standards Act (FLSA) because they were required to work during lunch, on weekends, and late into the night on a regular basis. Plaintiffs also alleged that Defendant “verbally disciplined employees for logging more than forty hours per week” and would adjust employees' time records to stay under the overtime threshold. In response to these allegations, Defendant moved to dismiss the action on the basis of collateral estoppel due to a previous lawsuit filed against Defendant in California for the same overtime violations.

The Court dismissed the FLSA claims for nationwide relief based upon issue preclusion -- the California-filed class-action was dismissed because the members of the proposed class were not similarly situated. However, the Court maintained the statewide action because the prior case did not contemplate an Illinois-only class-action and therefore could not have been litigated previously.

Continue reading "Northern District of Illinois Rules that State Law Overtime Claims Not Precluded by Prior Dismissal of FLSA Class-Action" »

Because we focus on large-scale overtime class-action lawsuits, the attorneys here at DiTommaso-Lubin have helped clients from many different fields recover their unpaid wages. We think it is important for all of our potential clients out there to understand what kinds of issues arise in wage and hour cases, so our Evanston overtime attorneys are always on the look-out for new decisions. In fact, our lawyers discovered a federal case in the Northern District of Illinois that involves workers in the medical industry.

In Howard v. Renal Life Link Inc., Plaintiffs worked for Defendant as dialysis technicians and routinely worked over forty hours each week, but Defendant allegedly deducted any overtime worked and paid Plaintiffs for only forty hours. The named Plaintiff complained to Defendant that she was not being paid properly for all of the time that she had worked, but Defendant allegedly ignored these complaints and continued to deduct any time worked over forty hours each week. Plaintiffs then filed suit alleging that these working hour deductions constituted violations of both the Illinois Minimum Wage Law (IMWL) and the Fair Labor Standards Act (FLSA). In response, Defendants filed a motion to dismiss the action under Federal Rule of Civil Procedure (FRCP) 12(b)(6) alleging that Plaintiff failed to supply sufficient factual evidence in the complaint in order to meet the requirements of FRCP 23.

Defendant's based their argument that Plaintiff failed to allege enough facts because the complaint contained allegations based “upon information and belief” instead of hard evidence. The Court found this argument unpersuasive, however, because FRCP 8 allows such allegations as long as there is sufficient detail in the complaint to make the claims facially plausible. In denying Defendant's motion to dismiss, the Court held that the issues brought up by Defendant were properly analyzed at the class certification phase of the case, and were not properly brought in a 12(b)(6) motion to dismiss.

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